On average, Americans get 189 cable TV channels and only watch 17

A new Nielsen report raises questions about the channel-bundling system.

In a blog post on Tuesday, Nielsen reported that on average, US homes receive 189.1 TV channels, but viewers only watch 17.5 of those channels.

The news will appear in Nielsen's forthcoming “Advertising & Audiences Report,” and while the results seem somewhat intuitive, they articulate a very real problem in cable TV—the fact that consumers often feel forced into paying for a lot of TV they never watch.

Nielsen's blog post today showed that the number of cable channels in an average US household has grown dramatically over the last five years, but the number of channels that viewers actually watch has hardly changed at all. In 2008, US households received an average of 129.3 channels but only actually viewed 17.3 channels. In 2013, the number of channels received increased 46 percent, but the number of channels viewed only increased 1 percent.

Nielsen

The data, Nielsen says, "substantiates the notion that more content does not necessarily equate to more channel consumption. And that means quality is imperative—for both content creators and advertisers."

The cause of stagnant channel-tuning may not just be about poor-quality channels; competition from new services surely plays a part as well. Cord-cutters have long called for the unbundling of channels from cable subscriptions, and as services like Netflix, iTunes, and set-top boxes with content-specific apps gain market share, it has become easier to ditch old-school cable TV if the bills get too high or consumers feel like they're paying for a product they don't want.

Cable companies counter that the price of cable TV wouldn't change much if channels were served à la carte because content providers won't sell the most popular programs to cable companies unless the provider's other channels are also served up. As the Los Angeles Timesnotes, “If a cable network were suddenly in 30% fewer homes, it would need to find a way to make up for that lost revenue, and the easiest approach would be to just charge the people who still get the channel even more.”

“However, the rising cost of sports programming is starting to lead to louder calls that at least some content should be sold to consumers who want it and not forced on everyone,” the LA Times continues.

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Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

But you get so much more for the same money. And then we can charge you more later because you're getting SOOOOO much more, we were really giving you too good of a deal. So we don't feel bad about the price increase and sleep very well at night on our mattresses stuffed with cash.[/cable company]

I went to a friend's house yesterday and they had the new X1 box. I was actually wondering why they don't just switch to an all internet based business and have those individual channels be a sort of RSS App that you can curate on your own. You get to watch all the commercials they want you to, and you don't need to worry about the clutter from sports programming and music channels that you never watch. Channel numbering that gets restructured time to time needs to go the way of the dodo.

Aside from cable companies looking to expand their money piles, and passionate enthusiasts of the 'obscurantist ukelele fanciers channel' who think that it deserves to be subsidized by enforced bundling, has bundling ever struck anybody as a good idea?

I'm pretty sure that most people only watch a tiny amount of what's available on Netflix, Hulu, Amazon Video, Crunchyroll, or whatever streaming services they subscribe to, but people aren't clamoring for a la carte access to movies or TV shows on those services, are they? I suppose it works for some people, but most people prefer a large buffet of choices, even if they're only going to watch a few of them.

Similarly, you rarely hear people celebrating airlines unbundling bag fees from the base fare, celebrating about how "I hardly ever check a bag, so this is great for me not having to subsidize those bag checkers!"

There are underlying issues for why cable service is so expensive, but a la carte versus bundle packaging wouldn't make a whole lot of difference over all. It would help people with unusual tastes, though.

Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

The problem with ala-carte is people assume that networks are going to charge the wholesale bundled rate to normal consumers. They won't.

They're going to charge more to make up for what they lost. Want Food Network that will be $5. ESPN another $10. Nickelodeon and Cartoon Network for the kids? That will be another $5 a piece.

Before you know it you're paying the same as you were before, but now have less channels.

Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

If they ever allow a la carte pricing, you'd be lucky to get 5 channels for $30. ESPN alone would probably be $10 by itself.

Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

The problem with ala-carte is people assume that networks are going to charge the wholesale bundled rate to normal consumers. They won't.

They're going to charge more to make up for what they lost. Want Food Network that will be $5. ESPN another $10. Nickelodeon and Cartoon Network for the kids? That will be another $5 a piece.

Before you know it you're paying the same as you were before, but now have less channels.

But is that really so bad, when now you're only paying for what you actually watch?

The fundamental misconception here is that dropping the Explosions HD channel and the Reality Shows of New England channel would save anyone money. There is no savings to be had, because the marginal cost to the cable company of a channel is so low.

It's like value meal pricing at fast food joints - it's not uncommon for the bundle (sandwich, fries, drink) to be only pennies more expensive than buying just the sandwich and fries á la carte. And that's when there's a real, physical good changing hands, not an ephemeral data stream.

Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

The problem with ala-carte is people assume that networks are going to charge the wholesale bundled rate to normal consumers. They won't.

They're going to charge more to make up for what they lost. Want Food Network that will be $5. ESPN another $10. Nickelodeon and Cartoon Network for the kids? That will be another $5 a piece.

Before you know it you're paying the same as you were before, but now have less channels.

But is that really so bad, when now you're only paying for what you actually watch?

I suppose that really depends on your habits. If you only watch 5 channels you're getting a steal, but if you watch 17. You better get some knee pads.

While I hate that I have so many channels I don't watch (all I use it for is live sports), bundling is how they make it reasonable to afford it. From what I've read ESPN would cost $100 per person to remain as profitable as it is. How much do you think other channels that aren't as popular would cost? It would cost twice as much for a fraction of the channels.

Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

If they ever allow a la carte pricing, you'd be lucky to get 5 channels for $30. ESPN alone would probably be $10 by itself.

I'm pretty sure that most people only watch a tiny amount of what's available on Netflix, Hulu, Amazon Video, Crunchyroll, or whatever streaming services they subscribe to, but people aren't clamoring for a la carte access to movies or TV shows on those services, are they?

But a la carte access IS available for most of the items on those services.

Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

The issue is that the 10 channels you watch would cost more than $30. There's probably some room for movement below current pricing levels, but there are some basic economics at play as well; if the customer is willing to pay $50 for the package containing channels X, Y, and Z that they watch, then the price of those channels a la carte should also be $50.

People point to carriage fees of channels they don't watch (and those they do), and assume that this is what that channel would cost a la carte, which is also a fantasy. Those carriage fees are set with viewership numbers in mind, they know how many subscribers actually watch ESPN or AMC. So if ESPN's carriage fee is $5 per subscriber, but only 20% of subcribers watch it, the "real" carriage fee per viewer is $25 (numbers are for illustration only). So you should expect to pay somewhere north of $5 and south of $25 for an a la carte option, and probably closer to the latter.

Same for any channel. If AMC fetches $2 per subscriber, but 90% of subscribers are also viewers, the fee is $2.22 per viewer. And so on. The high carriage fees of channels in base packages set a floor for that tier, sure, but for the average subscriber odds are their a la carte bill would be closer to that floor than they'd like to believe.

You, I, and people like us are all excluded from the set of cable watchers who've agreed to install Nielson's monitoring boxes - from which the report is derived from.

You are counted in the Nielsen numbers. They just decline to waste money by monitoring your lack of activity. Instead they calculate the number of households that do not watch traditional TV and put the number in the correct space on their report. They report the estimated number of homes not watching TV in addition to the detailed reports on the habits of those who do watch TV. The breakdown for the non-TV households in terms of interest is simple...any channel gets zero viewers from this category.

I'm pretty sure that most people only watch a tiny amount of what's available on Netflix, Hulu, Amazon Video, Crunchyroll, or whatever streaming services they subscribe to, but people aren't clamoring for a la carte access to movies or TV shows on those services, are they? I suppose it works for some people, but most people prefer a large buffet of choices, even if they're only going to watch a few of them.

Similarly, you rarely hear people celebrating airlines unbundling bag fees from the base fare, celebrating about how "I hardly ever check a bag, so this is great for me not having to subsidize those bag checkers!"

There are underlying issues for why cable service is so expensive, but a la carte versus bundle packaging wouldn't make a whole lot of difference over all. It would help people with unusual tastes, though.

netflix is only $7.99 and i can subscribe to just netflix. all together they are about $30 a month but i don't have to buy them all to get one

as it is now netflix is a huge money maker for the content sellers who force cable companies to sell the bundled channels. most netflix users buy it on top of cable so it's getting paid for content twice

I went to a friend's house yesterday and they had the new X1 box. I was actually wondering why they don't just switch to an all internet based business and have those individual channels be a sort of RSS App that you can curate on your own. You get to watch all the commercials they want you to, and you don't need to worry about the clutter from sports programming and music channels that you never watch. Channel numbering that gets restructured time to time needs to go the way of the dodo.

Shifting between 'channels', the actual slices of spectrum (whether on the air or the wire), has its purposes; but it's kind of nuts that it's still common to make users worry about that despite the fact that basically no TVs have been old-school analog tuned monsters for ages now.

Even with NTSC, they managed to bodge in a low bandwidth digital metadata channel (mostly for closed captioning), and ATSC is nothin' but bits, so carving out a modest little metadata channel would just be a matter of convention. And yet, even though the universe of channels in any given situation is fairly small and well known, nope, no DNS-like abstraction of channels into names that people actually care about.

Nobody complains about shifts in IP allocation, because the system makes it effectively transparent. Way to suck, TV.

Do they count both the HD and SD versions of the same channel, or the east and west coast feeds separately?

Of course they count each channel separately. Your cable company does after all. Also the five public access channels, dozen or so home shopping channels, all of the foreign language channels, music channels, etc... You don't get 117 channels of stuff people would actually watch.

The problem is of course that the cable companies can't unbundle, because the channels are all owned by megacorps who hold popular channels hostage in order to force the cable companies to carry other channels. So to get FX you have to carry Fox News for example.

Plus, what do cable companies care? They're a monopoly anyway, they don't have to provide good value for money. Sure the internet is undercutting them, but since they're also ISPs and have gutted net neutrality that problem is going to be fixed pretty soon.

Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

The problem with ala-carte is people assume that networks are going to charge the wholesale bundled rate to normal consumers. They won't.

They're going to charge more to make up for what they lost. Want Food Network that will be $5. ESPN another $10. Nickelodeon and Cartoon Network for the kids? That will be another $5 a piece.

Before you know it you're paying the same as you were before, but now have less channels.

I'm pretty sure that most people only watch a tiny amount of what's available on Netflix, Hulu, Amazon Video, Crunchyroll, or whatever streaming services they subscribe to, but people aren't clamoring for a la carte access to movies or TV shows on those services, are they?

But a la carte access IS available for most of the items on those services.

Amazon Instant Video has lots of items that are a la carte for "Rent," (streaming) that aren't included with Prime. They don't seem to be particularly cheap compared to the all you can eat buffet bundles at both Amazon and elsewhere. The other services don't really have a la carte. There's some semblance of differing bundles you can get by subscribing to one service or another, especially when studios pull their shows and movies from one service and put it on the other.

I've rarely heard people celebrate, "Yay, Warner Bros is pulling their stuff from Netflix and putting it on their own exclusive streaming site, now instead of having to pay for bundled old WB movies and TV shows, I can go a la carte by studio, only subscribing to WB's archive site if I want WB stuff!" Instead, people seem to complain that stuff gets pulled from Netflix.

Partially that's because people get the sneaking suspicion (fair or not) that no matter what happens or what change occurs in how it's offered, they'll be getting less and paying more.

Something that everyone pretty much knew, but 'tis good to have the empirical data to back it up. When I canceled DirecTV, they asked if there was anything they could do to keep me. I responded with "I want a la carte channels. I want to pay $30/month for around 10 channels." In my mind, I'd subscribe to the sports channels I care about, and that'd be it. The lady informed me that I should have a nice day, and I told her to do the same.

The problem with ala-carte is people assume that networks are going to charge the wholesale bundled rate to normal consumers. They won't.

Exactly.

Your cable bill can be divided into three parts - content, infrastructure, and administrative/profit. The content is 50% of the bill, and the infrastructure, admin and profit make up the other 50%.

Infrastructure costs aren't going away. The cable plant is there in the ground and it has to be paid off with a reasonable return on investment.

Admin and profit certainly aren't going away. In fact they might go up because in order to give you a la carte, they will have a new STB that does IPTV (so they can lock out all the regular analog channels via an RF filter), plus all the IT overhead associated with building a new billing system that can handle a la carte.

The most insidious part of all this is that content companies will still likely bundle their channels to the cable company, regardless of how many people choose a la carte. In other words, ABC/Disney doesn't give a shit if 1/3rd of homes drop ESPN because it costs too much, Comcast is going to continue to pay $5 per household they service with cable television service for the rights to carry ESPN. How Comcast gets the money isn't ABC/Disney's problem. Congress would likely have to pass a law authorizing the FCC to force content providers to unbundle their own offerings before cable companies could even think about a la carte.

A more interesting statistic would be exactly WHAT those 17.whatever channels are for each of the last 6 years. I'd be willing to bet they haven't changed much if any, which should be very telling of the industry in general.

I'm pretty sure that most people only watch a tiny amount of what's available on Netflix, Hulu, Amazon Video, Crunchyroll, or whatever streaming services they subscribe to, but people aren't clamoring for a la carte access to movies or TV shows on those services, are they? I suppose it works for some people, but most people prefer a large buffet of choices, even if they're only going to watch a few of them.

Similarly, you rarely hear people celebrating airlines unbundling bag fees from the base fare, celebrating about how "I hardly ever check a bag, so this is great for me not having to subsidize those bag checkers!"

There are underlying issues for why cable service is so expensive, but a la carte versus bundle packaging wouldn't make a whole lot of difference over all. It would help people with unusual tastes, though.

The reason that people are not protesting the lack of ala carte offerings on VDO services is that they are ala carte by design. You are not forced to sit through Star Wars 1-3 in order watch New Hope ... you are even allowed to watch them in reverse order if you really want to and on your own schedule.

The traditional channels referred to, tell you what you will watch, when you will watch it and if you don't like the broadcaster's choices, feel free to change the channel. Result--most people do not bother with obscure channels due to lack of information about offerings and conflicting schedules (We need to take their blockbuster drama down a peg...put our blockbuster drama in the same time slot so no-one can watch both)

I'd really like to know which channels have the most audience for a whole day as opposed to each time slot. If 80% of people are watching 12ish channels daily, and rarely venture outside of those 12 channels, it sorta makes sense to bundle them up, and offer them at a discount, as an alternative to al la carte.

Of course, this means that al la carte would have to be the standard, which it isn't. Which sucks.

Edit: I know this info is readily available from Neilson, but Not in the format I was suggesting.

Even though we don't have a la carte channels right now, you can pretty much do a la cart programs. Between Hulu Plus, Amazon, iTunes and Vudu you can get most programming within 24 hours of it airing. A la carte channels seems kind of pointless when I'm sure most people only watch maybe 3 or 4 of the hundred of programs that are on in a week anyway.

The biggest hurdle right now is live content (sports, reality shows, news etc). Football is locked up with Directv, all the other sports are available online, but have blackout restrictions. Yeah, you can get around that with a VPN, but that's no common knowledge for the average consumer and it's an added cost. Until live content shifts to online cable is here to stay for a bit longer.